Indonesia: Import Duties on Goods

It is obvious that since leaving hukumonline.com I have been pretty slack at keeping up-to-date with Indonesian legal developments outside of the specific areas that interest me most. As a result, I missed a Minister of Finance Regulation dated 29 October 2010 (in Indonesian). This regulation deals with the duties payable on goods over a certain value that are brought into Indonesia.

What is interesting about this regulation is that it seems to be targeting passengers and getting them to declare all goods on entry. Yet, the last time I traveled to Indonesia I am sure that I had to fill in a Customs declaration form that listed what I could and could not bring into Indonesia and what values they could be before I had to declare them and pay any duties that were payable on these goods.

Is this a case of gaining on the merry-go-round and then losing on the swing? The government will soon be facing a rather large financial black hole when the Fiscal Tax that Indonesians and other permanent residents paid for leaving Indonesia shores is removed. Is this regulation really a not-so-subtle attempt to fill that hole?

The basic framework for the regulation, No. 188/PMK.04/2010, are Articles 10B(5), 13(2) and 25(3) of the Customs Law (Law No. 10/1995 as amended by Law No. 17/2006) If you contact hukumonline.com they might forward you Indonesian Legal Briefs and Indonesian Law Digests that I wrote on this area many years ago. Generally, ministerial regulations are used to facilitate implementation of provisions in superior laws.

The regulation distinguishes between personal effects and commercial goods. This is done with a view to establishing what duties are payable. Personal effects are defined as any personal goods that do not satisfy the elements of being commercial goods.

In essence, anyone that must declare personal effects or commercial goods that they are importing / bringing into Indonesia are to do so. They have up to 30 days prior to the date of arrival or 60 days from the date of arrival to do so. There are some variations in specific circumstances for these time limits. For passengers of an airline this can be done on the day of arrival.

The regulation stipulates in Article 8 that the duty free limits are USD 250 for individuals and USD 1000 for families. For any value over these limits duty is payable. Additionally, it is permissible to import 200 cigarettes, 25 cigars, 100 grams of tobacco and 1 litre of alcohol. As I recall, this is pretty much as it was when I last landed in Jakarta. The duty free limits for cabin crew and airline staff, presumably on official duties, are less than for other individuals.

The system is continues to be a red line (declaring goods) and green line (nothing to declare). The regulation lists in Article 13 all the goods that must be declared irrespective of value and sets a limit on cash that may be carried. The cash limit is IDR 100 million or the equivalent in foreign currency. Where a Customs Officer has any suspicions about a passenger, then that Customs Officer is entitled to conduct a physical inspection of the passengers personal effects. In the event the physical inspection uncovers goods that have not been declared, then the passenger / owner of those goods is required to pay the duty that is due. Receipts for any duties paid must be provided to the passenger paying them.

As far as I can tell the regulation does not expressly provide exceptions for goods that have been owned for more than 12 months. I will need to go and check associated regulations to determine this (I have not downloaded them onto my current laptop). However, off the top of my head I recall that there exceptions applied to goods that had been owned for more than 12 months.

For example, if you were an Indonesian student going to study in a foreign university and took your laptop with you. When you returned in 12, 18, 24, or 36 months time with the same laptop there was no need to declare this as a personal effect that was subject to duty.

An article from Kompas (in Indonesian) that includes some comments from the Director General of Customs at the Ministry of Finance does not provide any insight on this front. The example provided only suggests that a camera that is valued at USD 300 will be subject to duty on the USD 50 that exceeds the USD 250 duty free limit. Unfortunately, the Director General does not note any exception for second-hand goods or goods that have been owned for more than 12 months.

If I find anything relevant to a better understanding of what is subject to duty, outside of what I have noted here, I will post it as a postscript.

The regulation comes into force on 1 January 2011.